Treasury and Federal Reserve Financial Assistance in Title IV of the CARES Act (P.L. 116-136)

Summary: The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; H.R. 748 ) was signed into law as P.L. 116-136 on March 27, 2020, to assist those affected by the economic impact of Coronavirus Disease 2019 (COVID-19). This assistance is targeted to consumers, businesses, and the financial services sector. A key part of this assistance is provided to eligible businesses, states, and municipalities in Division A, Title IV of the CARES Act.

Summary: Title IV allocates $500 billion to the Treasury Department (through the Exchange Stabilization Fund) to make loans and guarantees for three specified industriesâpassenger airlines, cargo airlines, and businesses critical to national securityâand to support Federal Reserve lending facilities. Some have characterized this as a "bailout" of private industry; others assert it is necessary to avoid employment losses and maintain economic stability. Of the $500 billion, Treasury can make up to $25 billion available to passenger airlines, up to $4 billion to cargo airlines, and up to $17 billion to businesses critical to maintaining national security. Treasury can make the remainderâup to $454 billion, plus whatever is not used to assist the specified industriesâavailable to the Federal Reserve. The authority to enter into new transactions terminates on December 31, 2020. Recipients are legally required to repay assistance with interest, although the ultimate subsidy involved will not be known until terms, such as interest rates and fees, have been decided and it becomes clear to what extent firms are able to repay.

Summary: Title IV also provides up to $32 billion to continue payment of employee wages, salaries, and benefits at airline-related industries. The Treasury Secretary has discretion to determine what compensation to seek for this assistance and has reportedly chosen not to seek compensation from smaller recipients. According to Treasury, 93 air carriers had received $12.4 billion under the Payroll Support Program as of April 25, 2020.

Summary: Most funding under Title IV has been used to backstop a series of Federal Reserve emergency programs created in response to COVID-19. These programs assist affected businesses or markets by making loans or purchasing assets. To date, the Fed has created programs to support markets for commercial paper, corporate bonds, municipal bonds, and asset-backed securities, as well as a loan program to help businesses with under 10,000 employees or under $2.5 billion in revenues maintain employment. To date, $215 billion of CARES Act funding has been made available by the Treasury to reimburse the Federal Reserve for potential losses on any transactions in these programs.

Summary: This assistance carries a number of terms and conditions. All funding faces certain conditions, such as limiting eligibility to U.S. businesses, as defined by the act, and following rules to avoid conflicts of interest. Firms receiving loans, loan guarantees, or grants directly from Treasury must maintain at least 90% of March 24, 2020, employment levels; face controls placed on share buybacks, dividends, and executive salaries; and must provide Treasury specific compensation (e.g., warrants or equity). In addition, Title IV establishes a special inspector general and a Congressional Oversight Commission to oversee the operations carried out under the title. Finally, the key agencies involved in providing this assistance (i.e., the Federal Reserve and Treasury) and the Government Accountability Office must make available to the public and Congress a series of reports on operations under Title IV of the act.

Economic conditions have deteriorated rapidly as the spread of Coronavirus Disease 2019 (COVID-19) has led policymakers to limit or close public institutions and business operations, increasing financial hardship for many Americans due to layoffs or time off work. Financial institutions, their regulators, and other government agencies have responded by working with consumers to allow those affected by COVID-19 to temporarily alleviate their financial obligations. As losses continue to mount on businesses from lower consumer demand and rising unemployment, Congress has stepped in with legislation aimed at mitigating the economic impact of COVID-19.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; H.R. 748 ) into law as P.L. 116-136 . The CARES Act is a wide-ranging act to provide relief to consumers, small businesses, and certain industries amid the economic fallout of COVID-19. The law contains two divisions. Division A contains six titles aimed at making funds available to different entities through various programs, including rebate checks to taxpayers; loans to small businesses for payroll; protections for consumers with outstanding payments (e.g., mortgages, student loans, and rental and healthcare payments); loans and loan guarantees and other investments to help the financial industry and other selected industries; and other public funds for federal, state, local, and tribal government programs aimed at managing the disaster recovery from the national health crisis. Division B provides FY2020 supplemental appropriations for federal agencies to respond to COVID-19. (Hereinafter, title and section references in this report refer to Division A, unless otherwise specified.)

Title IV of the CARES Act contains numerous provisions aimed broadly at stabilizing the economy and helping affected households and businesses. It has received considerable attention for containing funding for industry and financial services. Specifically, Section 4003 directs the Department of the Treasury (Treasury) and the Federal Reserve (Fed) to make up to $500 billion available to support various businesses in the aviation sector, as well as the financial system. Some have characterized this as a "bailout" of private industry; others assert it is necessary to avoid employment losses and maintain economic stabilityâthe two views are not necessarily mutually exclusive.

Title IV also permits federal guarantees for uninsured bank deposits and money market funds, which are beyond the scope of this report. In addition to the financial assistance provided in Title IV, the CARES Act provides financial assistance to small businesses in Title I (including the Payroll Protection Program) and assistance to states and municipalities in Title V. See CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options , by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry for information specifically about assistance targeting small businesses found in Title I of the CARES Act.

This report provides an overview of Section 4003 and related provisions and explains the terms and conditions associated with the assistance. The report's Appendix compares these provisions to the 2008 Troubled Asset Relief Program (TARP).

Financial Assistance in Division A, Title IV7

This report is about the Title IV provisions specifically designed to provide funding for eligible businesses, states, and municipalities, as defined by the act. In particular, Section 4027 appropriates $500 billion to the Exchange Stabilization Fund (ESF) for use by the Treasury Secretary, and Section 4003 allows Treasury to use the $500 billion to support eligible businesses, states, and municipalities that have suffered losses due to COVID-19. As discussed in the next section, Section 4003 allocates up to $46 billion for Treasury to directly provide loans and loan guarantees as follows: (1) not more than $25 billion for passenger air carriers (and certain related businesses), (2) not more than $4 billion for cargo air carriers, and (3) not more than $17 billion for businesses critical to maintaining national security. Treasury may make funds from the remaining $454 billion, plus any unpledged funding from the $46 billion, available to support Fed facilities to provide liquidity to the financial system through lending to eligible businesses, states, and municipalities (described in the " Federal Reserve Emergency Facilities Backed by the CARES Act " section, below).

Section 4029 terminates this authority on December 31, 2020, and allows outstanding loans and guarantees to be modified, restructured, or otherwise amended, subject to a restriction: the duration of assistance to the passenger air industry cannot be extended beyond five years from the initial origination date.

Section 4003 requires recipients to repay this assistance with interest, fees, and in some cases, compensation in the form of warrants, equity, or senior debt. Under the Federal Credit Reform Act (FCRA; P.L. 101-508 ), the Office of Management and Budget and the Congressional Budget Office are to estimate the subsidy associated with this assistance based on the difference between the present discounted value of both the assistance and income received by Treasury from principal and interest payments (along with other forms of compensation). The ultimate size of this subsidy will not be known until terms, such as interest rates and fees, have been decided and it becomes clear to what extent firms are able to repay. By contrast, Sections 4112, 4113, and 4120 provide up to $32 billion in grants to continue payment of employee wages, salaries, and benefits at airline-related industries. The Treasury Secretary has discretion whether to seek compensation for these grants.

Treasury has broad discretion to decide how much of each part of the funding to make available to the specified industries or the Fed, in what form, and for what purpose. These funds are made available with certain terms and conditions, however (as discussed in the " Terms and Conditions " section, below). For example, Section 4004 sets executive compensation limits on certain companies receiving assistance; Section 4019 restricts eligible recipients of assistance to avoid conflicts of interest; Sections 4114 and 4116 limit recipient firms from taking certain actions; and Sections 4025 and 4115 prohibit conditioning assistance on entering into collective bargaining negotiations.

Additionally, several provisions provide enhanced oversight for the Title IV funding programs. Sections 4018 and 4020 establish a Special Inspector General and a Congressional Oversight Commission to monitor activities made pursuant to provisions in Title IV, and Section 4026 requires reports from the key agenciesânamely Treasury and the Fedâon their Title IV activities.

The next two sections will focus on the financial assistance provisions granted to specified industries and for Fed programs.

Loans, Loan Guarantees, and Other Support for Selected Industries13

Congress chose to make direct Treasury support available to three specific industries (passenger and cargo airline industries, as well as certain national security businesses) that it deemed particularly in need of support. This assistance was unlikely to meet certain statutory requirements for a Fed program (i.e., that Fed assistance be broadly based and not for the purpose of avoiding bankruptcy), and it comes with more terms and conditions than assistance for recipients of Fed programs supported by the CARES Act. The Title IV support for these industries comes in three main forms: loans and loan guarantees, tax holidays for certain excise taxes, and payroll grants for air carrier workers.

Section 4003 makes up to $46 billion available for federal loans and loan guarantees directly from Treasury to the aviation sector and to businesses critical to maintaining national security:

not more than $25 billion for passenger air carriers, eligible businesses certified to perform inspection, repair, replace, or overhaul services, and ticket agents; not more than $4 billion for cargo air carriers; and not more than $17 billion for "businesses critical to maintaining national security"âa term that the act does not further define. On April 10, 2020, the Treasury Secretary released information on which types of firms would be eligible under this definition.

The Treasury Secretary is required under Section 4006 to coordinate with the Transportation Secretary to make these loans. Other terms and conditions applying to this assistance are discussed in " Terms and Conditions ," below.

Section 4007 institutes a tax holiday under which no excise taxes will be imposed for the transportation of persons, the transportation of property (cargo), and aviation fuel after the date of enactment through calendar year 2020. These include a variety of taxes on airline passenger ticket sales, segment fees, air cargo fees, and aviation fuel taxes paid by both commercial and general aviation aircraft. They have been the primary revenue sources for the federal Airport and Airways Trust Fund.

Section 4120 appropriates $32 billion to assist aviation workers. From this amount, Section 4112 allows the Treasury Secretary to provide

up to $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for contractors who provide ground servicesâsuch as catering services or on-airport functionsâdirectly to air carriers.

All such assistance must be used exclusively for continuing the payment of employee wages, salaries, and benefits. Section 4117 gives the Treasury Secretary discretion to determine what compensation to seek for this assistance. Treasury announced it would not seek compensation from recipients receiving less than a minimum amount under the program. The Treasury Secretary is required to coordinate with the Transportation Secretary in implementing the relief for aviation workers.

Section 4113 indicates that eligible airlines or contractors would receive an amount equal to their 2019 second- and third-quarter (from April 1, 2019, through September 30, 2019) salaries and benefits. The law required the Treasury Secretary to publish streamlined and expedited procedures no later than 5 days from the enactment date and to make initial payments within 10 days from enactment to air carriers and contractors whose requests for such assistance are approved. If it were determined that the aggregate amount of eligible financial assistance exceeds the amount available, the Treasury Secretary would provide the available aid on a pro rata basis.

On April 20, 2020, Treasury announced that airlines representing 95% of U.S. capacity were participating in the Payroll Support Program. On April 25, 2020, Treasury announced that 93 air carriers had received $12.4 billion to date.

CARES Act Funding Available to the Federal Reserve23

The Federal Reserve, as the nation's central bank, was created as a "lender of last resort" to the banking system when private sources of liquidity become unavailable. This role is minimal in normal conditions but has been important in periods of financial instability, such as the 2007-2009 financial crisis. Less frequently throughout its history, the Fed has also provided liquidity to firms that were not banks. In the financial crisis, the Fed created a series of temporary facilities to lend to or purchase securities of nonbank financial firms and markets under emergency authority found in Section 13(3) of the Federal Reserve Act (12 U.S.C. Â§343). It has begun to do so again in response to COVID-19, even before enactment of the CARES Act.

Although the CARES Act does not preclude the Fed from independently responding to COVID-19 using its own funds, it is left to the Treasury Secretary to decide whether and how much of the CARES Act funds to provide to the Fed and on what general terms. After deducting assistance provided to the three specified industries, the remainder of the $500 billionâat least $454 billionâis available for Treasury to make loans, loan guarantees, or investments in programs or facilities established by the Fed to "provid(e) liquidity to the financial system that supports lending to eligible businesses, states, or municipalities." As noted in the " Financial Assistance in Division A, Title IV " section, eligible businesses and states are defined by the act. The Fed's facilities may make loans, purchase newly issued obligations (e.g., debt securities) directly from issuers in primary markets, or purchase seasoned obligations from investors in secondary markets.

The act provides Treasury and the Fed broad discretion on how to structure these programs or facilities. (Terms and conditions applying to this assistance are discussed in the section titled " Terms and Conditions .") Theoretically, the transactions could be structured in many different ways. In practice, Treasury has used CARES Act funding to make equity investments in Fed facilities, presumably as a backstop to cover any future losses, as described below.

Federal Reserve Emergency Facilities Backed by the CARES Act

Before enactment of P.L. 116-136 , Treasury had already made equity investments through the ESF in Fed emergency programs created in response to COVID-19. Because the CARES Act appropriated $500 billion to the ESF, these Fed programs are now, in effect, backed by CARES Act funding. The programs are the following:

Commercial Paper Funding Facility (CPFF). The CPFF purchases newly-issued commercial paper from all types of U.S. issuers who cannot find private sector buyers. Commercial paper is short-term debt issued by financial firms (including banks), nonfinancial firms, and "asset backed" pass-through entities that purchase loans. Money Market Fund Liquidity Facility (MMLF ). The MMLF makes nonrecourse loans to financial institutions to purchase assets that money market funds are selling to meet redemptions. This reduces the probability of runs on money market funds caused by a fund's inability to liquidate assets. Primary Market Corporate Credit Facility (PMCCF ) and Secondary Market Corporate Credit Facility (SMCCF) . The Fed created two new facilities to support corporate bond marketsâthe PMCCF to purchase newly-issued corporate debt from issuers and the SMCCF to purchase existing corporate debt or corporate debt exchange-traded funds on secondary markets. The issuer must have material operations in the United States and cannot receive direct federal financial assistance related to COVID-19. Term Asset-Backed Securities Loan Facility (TALF). The TALF makes nonrecourse, three-year loans to private investors to purchase newly-issued, highly-rated asset-backed securities (ABS) backed by various nonmortgage loans. Eligible ABS include those backed by certain auto loans, student loans, credit card receivables, equipment loans, floorplan loans, insurance premium finance loans, small business loans guaranteed by the Small Business Administration (SBA), or servicing advance receivables. Main Street Lending Program (MSLP). The MSLP buys loans from depository institutions that are four-year loans to businesses with up to 10,000 employees or up to $2.5 billion in revenues. The loans to businesses would defer principal and interest repayment for one year, and the businesses would have to make a "reasonable effort" to retain employees. This program may be particularly attractive to businesses too large to qualify for SBA assistance. Municipal Liquidity Facility (MLF). The MLF purchases shorter-term state and municipal debt in response to higher yields and reduced liquidity in that market. The facility purchases only debt of states, larger counties (with at least 500,000 residents), and larger cities (with at least 250,000 residents).

Some programs were announced with an overall size limit (see Table 1 ). During the 2008 financial crisis, however, actual activity typically did not match the announced size. These facilities extend the Fed's traditional "lender of last resort" role for banks to be the "buyer of last resort" for broad segments of financial markets that have become illiquid due to COVID-19 and "lender of last resort" for nonfinancial firms. To extend its traditional role, the Fed has used its Section 13(3) emergency lending authority. The Fed also used this authority to assist nonbank financial firms and markets in the 2008 financial crisis. The 2020 facilities go beyond the scope of the 2008 facilities by purchasing loans of nonfinancial businesses and debt of states and municipalities. In some programs, the Fed purchases securities in affected markets directly. In other programs, the Fed makes loans to financial institutions or investors to intervene in affected markets; these loans are typically made on attractive terms to incentivize activity, including by shifting the credit risk to the Fed.

By law, the Fed must structure these facilities to avoid expected losses, and the facilities charge users interest and/or fees as compensation. To that end, Treasury has pledged ESF funds for each of these facilities to protect the Fed from future lossesâalthough these losses would still be borne by the federal government. The Treasury Secretary approved each facility.

The loans and asset purchases of the facilities are funded by the Fed using its resources but are backed by the ESF in the event of losses. The MSLP and the MLF were created after the CARES Act's enactment; the other facilities predate the CARES Act. When the CARES Act directed $500 billion to the ESF, all of these programs, in effect, became backed by the CARES Act.

Table 1 summarizes how much CARES Act funding has been pledged to each facility. In total, $215 billion has been pledged to date.

There has been talk of how the Fed can "leverage" the CARES Act funding of $454 billion (or more) into greater amounts of assistance by combining it with the Fed's funds. Although the use of this term is more colloquial than technical from a financial perspective, Table 1 illustrates how this is accomplished. For example, the MLF is planned to purchase up to $500 billion of assets using $35 billion of CARES Act funding.

Tracking CARES Act Funding for Federal Reserve Programs

As required by law, the Fed has issued reports to Congress describing the purpose and details of each facility. Total loans or asset purchases through the facilities are published weekly as part of the Fed's balance sheet. The Fed also announced that it would publicly report on transactions under CARES Act 13(3) facilities at least every 30 days. Details of the report are to include, "names and details of participants in each facility; amounts borrowed and interest rate charged; and overall costs, revenues, and fees for each facility." In the past, the Fed has provided details on emergency facilities' activities in quarterly reports.

Assistance to States and Municipalities and Medium-Sized Businesses

The act envisions the Fed using CARES Act funding to help two broad groups that had not been the targets of Fed emergency lending programs up to that point: (1) states (as defined by the act) and municipalities; and (2) medium-sized businesses , defined as those with between 500-10,000 employees, including nonfinancial businesses. The Fed has not lent to or purchased the securities of nonfinancial businesses and states and municipalities since the 1930s. "Medium-sized" businesses may be too small to issue publicly-traded debt securities that the Fed is purchasing through the PMCCF and SMCCF and too large to qualify for SBA assistance provided by the CARES Act. The act encourages, but does not require, the Fed to work with the Treasury Secretary to create programs assisting these two groups and does not limit Fed assistance to these two groups only.

In particular, Section 4003 presents a detailed proposal for assisting businesses with 500-10,000 employees. This proposal is not required by the act, but the Treasury Secretary "shall endeavor to seek the implementation of" a Fed facility that provides financing to banks and other lenders to make direct loans to U.S. "eligible businesses" (as defined) and nonprofits at an interest rate not higher than 2% and with no principal or interest due for six months to retain their workforces. There are a series of restrictions on the borrower.

The intended recipient (businesses with up to 10,000 employees) and purpose (to maintain employment) of the proposed facility are similar to the Fed's MSLP (described above), which was formally announced on April 9, 2020, but was publicly discussed before enactment of the CARES Act. However, the terms differ. Section 4003 states that the medium-sized business proposal outlined does not preclude the Fed establishing the MSLP.

Section 4003 sets forth a number of terms and conditions for the assistance provided. Some of these provisions apply broadly to both assistance extended to the Fed and the specified industries, and others apply only to specified industries. Table 2 compares and contrasts the various terms and conditions for each of these programs. In addition, there are oversight and reporting requirements associated with the assistance, which are detailed in the section titled " Oversight Provisions ."

Loan and Loan Guarantee Terms and Conditions for Specified Industries

In an effort to ensure assistance is used to maintain employment levels and the ongoing viability of the recipient, Section 4003 loans and loan guarantees must satisfy several terms and conditions. To approve the loans, the Treasury Secretary must determine that other credit is not reasonably available to the applicant at the time of the transaction. The intended obligation must be prudently incurred by the borrower, and the loan must be sufficiently secured or made at a rate that reflects the risk of the loan or loan guaranteeâto the extent practicableâand not less than an interest rate based on market conditions for comparable obligations prevalent prior to the outbreak of COVID-19. The duration of the loan must be as short as practicableânot to exceed five years. Further, Treasury may not issue a loan or loan guarantee unless it receives warrants, senior debt, or equity in the borrower.

Additional terms and conditions apply to the loan or loan guarantee recipient. The agreement must provide that neither the borrower nor any affiliate may engage in stock buybacks, unless contractually obligated to do so, or pay dividends until 12 months after the date the loan is no longer outstanding. Until September 30, 2020, the borrower must maintain its employment levels as of March 24, 2020, to the extent practicable, and may not reduce its employment levels by more than 10% from the levels on that date. The borrower must certify that it is a U.S.-domiciled business with significant operations in and a majority of its employees based in the United States. The borrower must have incurred or must expect to incur covered losses such that the continued operations of the business are or would be jeopardized, as determined by the Treasury Secretary.

Section 4004 states that Treasury may enter into an agreement to make a loan only if the borrower agrees to specified limitations on the compensation and severance pay of executives and employees whose total compensation exceeded $425,000 in calendar year 2019. Total compensation, as defined in the act, is capped at the individual's 2019 compensation level, or if compensation exceeds $3 million, it is also capped at $3 million plus 50% of the 2019 compensation level above $3 million. Further, severance pay for those individuals is capped at twice the individual's 2019 compensation level.

Section 4005 establishes an air carrier's service obligation. It requires an air carrier receiving financial assistance under the act to maintain scheduled air transportation service, as the Transportation Secretary deems necessary, to ensure services to any point served by that air carrier before March 1, 2020, taking into consideration the air transportation needs of small and remote communities and the needs of healthcare and pharmaceutical supply chains. Such authority and any requirements issued shall terminate on March 1, 2022.

Section 4019 establishes that certain entities are ineligible to participate in Section 4003 transactions. An ineligible entity is a covered individual who owns a controlling interest in that entity (defined as "not less than 20 percent, by vote or value, of the outstanding amount of any class of equity interest in an entity"). Covered individuals are the President, the Vice President, an executive department head, a Member of Congress, or the spouse, child, or spouse of a child of any of those individuals.

Section 4115 protects collective bargaining agreements for a period lasting from the time financial assistance is issued and ending on September 30, 2020.

Terms and Conditions for Air Carrier Worker Support

To be eligible for grants to cover employee salaries under Section 4113, an air carrier or contractor must agree to

refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020; refrain from stock buybacks and dividends through September 30, 2021; comply with CARES Act provisions to protect collective bargaining agreements regarding pay or other terms of employment for a period lasting from the time financial assistance is issued and ending on September 30, 2020; and comply with limits on compensation of highly-paid employees, similar to those described above for airline loans, for a two-year period from March 24, 2020, to March 24, 2022.

Additionally, the Transportation Secretary is authorized to require, to the extent practicable, that an air carrier receiving this support continue services to any point served by that carrier before March 1, 2020, considering factors similar to those described above for airline loans under Section 4005.

To compensate the government for this assistance, Section 4117 provides that the Treasury Secretary may receive warrants, options, stock, and other financial instruments from recipients, as determined appropriate by the Secretary. (See the " Air Carrier Worker Support " section for more on Treasury's determination for receiving compensation.)

Terms and Conditions and Restrictions for the Federal Reserve Facilities

Some, but fewer, of the terms and conditions and restrictions placed on the industry assistance also apply to the Fed. Fed assistance may go only to U.S. businesses (as defined), and the conflict of interest and reporting requirements also apply to the Fed. Restrictions on executive compensation and capital distributions (stock buybacks and dividends) do not apply to Fed programs unless the Fed is providing direct loans to recipients; in the case of the Fed programs, the Treasury Secretary may waive these requirements "to protect the interests of the Federal Government." Likewise, requirements to provide the government with warrants or other forms of compensation do not apply to the Fed programs. As shown in Table 2 , fewer restrictions may have been placed on Fed programs than on the assistance to the three specified industries. Fewer restrictions may have been placed on Fed programs because of the Fed's independence from Congress and the Administration, and because most of the Fed programs are not intended to prevent recipients' imminent failure.

In addition to the conditions and restrictions in the CARES Act, the Fed typically has extended assistance to nonbank entities under its emergency authority found in Section 13(3) of the Federal Reserve Act. This authority places a number of restrictions on the Fed's activities, many of which were added or augmented by the Dodd-Frank Act ( P.L. 111-203 ). For example, actions taken under Section 13(3) must be broadly based and "for the purpose of providing liquidity to the financial system, and not to aid a failing financial company." Actions must also provide security (e.g., collateral) that is sufficient to protect the taxpayer and is based on sound risk management practices. Unlike financial firms, some entities impacted by COVID-19 may not have securities that can be posted as collateral. The CARES Act only states that "any applicable requirements under section 13(3) ... shall apply" to Fed programs created under the act. Nevertheless, after the enactment of the CARES Act, the Fed created the MSLP and MLF under Section 13(3).

To provide oversight of Title IV, the CARES Act created a special inspector general, Congressional Oversight Commission, and various reporting requirements.

Special Inspector General for Pandemic Recovery49

Section 4018 establishes a Special Inspector General for Pandemic Recovery (SIGPR) within Treasury. The SIGPR is nominated by the President with the advice and consent of the Senate and may be removed from office in the manner prescribed in Section 3(b) of the Inspector General Act of 1978. The SIGPR is tasked with conducting audits and investigations of Treasury's activities pursuant to the CARES Act, including collecting and summarizing the following information regarding loans provided by Treasury:

"A description of the categories of the loans guarantees, and other investments made by the Secretary"; "A listing of eligible businesses receiving loan, loan guarantees, and other investments" by category; An explanation and justification for each loan or loan guarantee; Biographical information about each person hired to manage or service the loans, loan guarantees, and other investments; and Financial information, including the total amount of each loan, loan guarantee, and other investment and the repayment status and any gains or losses.

The SIGPR is empowered to hire staff, enter into contracts, and broadly exercise the same authority and status as inspectors general under the Inspector General Act of 1978. The SIGPR is required to report to the appropriate committees of Congress within 60 days of Senate confirmation, and quarterly thereafter, on the activities of the office over the preceding three months, including detailed information on Treasury loan programs. The SIGPR position terminates five years after the enactment of the CARES Act (i.e., March 27, 2025).

From the $500 billion appropriated in Title IV, Section 4018 directs that $25 million shall be made available to the SIGPR as a nonexpiring appropriation.

Section 4020 establishes a five-member Congressional Oversight Commission in the legislative branch. The commission is directed to oversee implementation of Subtitle A of Title IV by the federal government and to issue regular reports to Congress.

The commission is directed to report to Congress "not later than 30 days after the first exercise by the Secretary and the Board of Governors of the Federal Reserve System of the authority under this subtitle and every 30 days thereafter." Such reports must include

(i) The use by the Secretary and the Board of Governors of the Federal Reserve System of authority under this subtitle, including with respect to the use of contracting authority and administration of the provisions of this subtitle.

(ii) The impact of loans, loan guarantees, and investments made under this subtitle on the financial well-being of the people of the United States and the United States economy, financial markets, and financial institutions.

(iii) The extent to which the information made available on transactions under this subtitle has contributed to market transparency.

(iv) The effectiveness of loans, loan guarantees, and investments made under this subtitle of minimizing long-term costs to the taxpayers and maximizing the benefits for taxpayers.

The commission is authorized to hold hearings and gather evidence, obtain data and other information from federal agencies upon request, hire staff, obtain the services of outside experts and consultants, request the detail of federal employees, and enter into contracts to discharge its duties.

Members of the commission are to be appointed by the Speaker of the House, the Senate majority leader, the House minority leader, and the Senate minority leader. Appointed commissioners who are not federal employees are to be paid "at a rate equal to the daily equivalent of the annual rate of basic pay for level I of the Executive Schedule for each day (including travel time) during which such member is engaged in the actual performance of duties vested in the Oversight Commission" and reimbursed for travel expenses. For FY2020, Level I of the Executive Schedule is $219,200 annually.

Funding for the commission's expenses is to be derived in equal amounts from the contingency fund of the Senate and an "applicable" account of the House. The Treasury Secretary and the Federal Reserve Board of Governors are instructed to "promptly" transfer funds to such accounts for the reimbursement of commission expenses.

Schedule for Reports, Disclosures, and Testimony

In addition to the establishment of the SIGPR and the Congressional Oversight Commission, Title IV requires the Treasury Secretary and the Fed Chair to issue reports, make disclosures, and provide testimony before congressional committees for a number of specified purposes. Collectively, these provisions require disclosure to Congress and the public of financial and other details on each transaction under Section 4003(b). These requirements are detailed in Table 3 .

Appendix. Comparisons to the Troubled Asset Relief Program (TARP)58

Over a decade ago, in the financial crisis and recession of 2007-2009, businesses and individuals in the United States and across the globe faced financial uncertainty unparalleled for a generation. Although the cause of the financial uncertainty differed greatly between the current circumstances as a consequence of Coronavirus Disease 2019 (COVID-19) and the financial crisis of 2007-2009, in each instance Congress has chosen to proactively assist in economic recovery.

As the financial crisis reached near panic proportions in fall 2008, Congress created the $700 billion Troubled Asset Relief Program (TARP) through the enactment in October 2008 of the Emergency Economic Stabilization Act (EESA; P.L. 110-343 ). Subsequently, Congress passed the $787 billion American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ), which provided relief to certain parts of the economy. The CARES Act combines elements of both aforementioned acts. Title IV of the CARES Act, with its assistance for firms and support of Federal Reserve financial sector facilities, more closely resembles TARP; a summary of aspects of TARP that parallel Title IV will be the focus of this appendix.

For a broader overview of the financial sector and industry assistance during the 2007-2009 financial crisis, please see CRS Report R43413, Costs of Government Interventions in Response to the Financial Crisis: A Retrospective , by Baird Webel and Marc Labonte. For a comparison of TARP and Title IV of the CARES Act, see Table A-1 .

The EESA authorized the Treasury Secretary to either purchase or insure up to $700 billion in troubled assets owned by financial firms. The general concept was that by removing such assets from the financial system, confidence in counterparties would be restored, and the system could resume functioning. This authority granted in the EESA was broad. In particular, the definitions of both troubled assets and financial institutions allowed the Secretary wide latitude in deciding what assets might be purchased or guaranteed and what might qualify as a financial institution. In practice, most TARP funding was not used to purchase troubled assets, instead being dedicated to capital injections for financial institutions, loans to the auto industry, and assistance for homeowners at risk of foreclosure. In a limited number of cases, TARP and Federal Reserve funds were used together. The EESA was later amended to reduce the authorized amount to $475 billion, when it became clear that the amount used would not exceed this amount.

Equity warrants in return for government assistance were specifically provided for in the TARP statute. The warrants were expected to provide a positive financial upside to the taxpayer if the private companies' fortunes improved as a result of the government assistance. Although resulting in positive returns for the government, the amount recouped through warrants ($9.58 billion) was less than through interest and dividends ($24.38 billion). The act did not specifically call for the government to receive large holdings of common stock. In several cases, however, the government ended up with large, sometimes controlling, equity positions in private companies. The government generally exercised little of the ownership control inherent in these large stakes. Common equity in companies was typically accepted in return for TARP assistance in order to strengthen the companies' capital positions. Such equity also provided a financial upside to the taxpayers when firms recovered, but it also had a potential downside when firms did not recover strongly.

The EESA granted the purchase authority for a maximum of two years from the date of enactment, meaning it expired on October 3, 2010. Commitments made under this authorization, however, could continue after this date, with no limit on how long assets purchased under TARP could be held by the government. At present, there continues to be funding disbursed under the housing assistance program and a small amount ($0.04 billion) of bank capital assistance outstanding.

Limits on Compensation and Labor Reduction

The EESA included limits on executive bonuses and golden parachutes and provided for possible compensation clawbacks. The EESA was later amended by ARRA to expand these limits and add additional corporate governance reforms, thus placing additional restrictions on participating banks in existing Capital Purchase Program contracts. The act amending the EESA also allowed for early repayment and withdrawal from the program without financial penalty. With the advent of more stringent requirements for TARP recipients, many banks began to repay, or attempt to repay, TARP funds. There was no employee retention requirement with TARP.

The EESA included a number of oversight mechanisms and reporting requirements. Similar to the CARES Act, it created a TARP Congressional Oversight Panel. The TARP Oversight Panel was a five-member, independent entity established in the legislative branch, appointed by congressional leadership, and directed to submit regular reports to Congress. In exercising its duties, the TARP Congressional Oversight Panel issued 30 reports and held 26 hearings between December 2008 and March 2011, according to its final report. The panel employed a total of 46 staff, utilized 3 detailees, and expended approximately $10.7 million through April 3, 2011. The five-member panel was appointed by the House and Senate leadership.

The EESA also required the Treasury Secretary to provide periodic updates to Congress, with both monthly overall reports and individual reports detailing "all transactions" made under TARP. The Comptroller General was specifically tasked with oversight responsibilities and regular audits, with the Secretary directed to provide appropriate facilities, funding, and access to records to facilitate this oversight.

The EESA created the Special Inspector General for TARP (SIGTARP) position with an initial $50 million in funding, which has been continued in annual appropriations since. The SIGTARP was provided similar powers and authorities as other inspectors general to conduct audits and investigations of TARP and issue quarterly reports until all assets held or insured by Treasury under TARP were disposed of. The SIGTARP issued its first report in 2010, with its latest report covering the last quarter of 2019. Congress appropriated $22 million in the Consolidated Appropriations Act, 2020 ( P.L. 116-93 ) for the SIGTARP position in FY2020.

The EESA required the Secretary to issue regulations or guidelines to "address, manage or prohibit" conflicts of interest arising in TARP, including the purchase and management of assets and the selection of asset managers and post-employment restrictions.

The EESA directed the Secretary to minimize the negative impact on taxpayers, including both direct and long-term costs and benefits. Market mechanism and private sector participation in operating the program were encouraged. The terms and conditions of Treasury asset purchases were to be designed to provide recompense to the taxpayer, including participation in the equity appreciation of a firm following Treasury asset purchases.


The Presidential Records Act: An Overview

Summary: Presidential records provide Congress, members of the public, and researchers with documentation, context, and explanations for presidential actions. The Presidential Records Act (PRA; 44 U.S.C. Â§Â§2201-2207) set forth requirements regarding the maintenance, access, and preservation of presidential and vice presidential information during and after a presidency.

Summary: This report describes the institutions involved in presidential recordkeeping, explains what is and is not considered a presidential record, and identifies recordkeeping responsibilities and access policies during and after a presidency. The report concludes with information and policy options for congressional oversight and enforcement of the PRA with respect to electronic records provisions under the Presidential and Federal Records Act Amendments of 2014.

Summary: Prior to the PRA, records were considered the President's private property. Now, the PRA states that presidential records are the property of the United States. Under the PRA, the President may request advice and assistance from the National Archives and Records Administration (NARA) regarding records management practices, and the Archivist of the United States (the head of NARA) plays an important role in the maintenance and access of a former President's records.

Summary: The PRA does not establish automatic access to an incumbent President's records, which may be protected by executive privilege on a case-by-case basis. However, the PRA does statutorily narrow an incumbent President's ability to restrict records access as the Administration draws to a close. As the length of time between the conclusion of a presidency and the present day increases, presidential records become more accessible.

Summary: Access to a former President's records is governed in terms of time passed since the conclusion of the presidency:

Summary: Less than five years out, no public access is granted due to the Archivist's processing of the records. Between five and 12 years out, the Archivist determines PRA restrictions with the former President in accordance with Title 44, Section 2204, of the U.S. Code . After 12 years, these PRA restrictions no longer apply.

Summary: Certain federal officials may access a former President's records within the 12-year time frame by gaining "special access" to presidential records. The PRA permits either house of Congress, committees, or subcommittees requesting information for chamber or committee business to be granted special access to the former President's records. In practice, observers have questioned what constitutes a House or Senate request for presidential records and who needs to make the request to qualify under the PRA. This statutory ambiguity may impact the ability of minority party members and general committee members to gain access to presidential records.

Summary: As a result of the Presidential and Federal Records Act Amendments of 2014, presidential records are assessed for preservation not by the media used to store the information but rather by the content of the information itself. Questions regarding the volume and completeness of records may be suitable for congressional consideration. Any delay in NARA's processing of records will directly impact timely access to those records and the ability of NARA to comply with the PRA's statutory directive to make records available as rapidly and completely as possible.

F ollowing his resignation as President, Richard Nixon wanted to destroy recordings created in the White House that, among other things, documented actions he and others took in response to investigations connected to a burglary in the Watergate building and his reelection campaign. Under policy at the time, presidential materials were considered the President's private property. In response, Congress passed a number of laws to preserve the integrity of documents and other information related to Nixon's presidency and made those laws applicable to all future presidencies.

Enacted in 1978, the Presidential Records Act (PRA; 44 U.S.C. Â§Â§2201-2207) established public ownership of records created by Presidents and their staff in the course of discharging their official duties. The PRA additionally established procedures for congressional and public access to presidential and vice presidential information and the preservation and public availability of such records at the conclusion of a presidency.

This report provides context on the institutions involved in presidential recordkeeping, explains what is and is not considered to be a presidential record, and identifies recordkeeping responsibilities and access policies during and after a presidency. The report concludes with information and policy options for congressional oversight and enforcement of the PRA with respect to electronic records provisions under the Presidential and Federal Records Act Amendments of 2014.

While the PRA provides similar provisions for records created by the Vice President, this report focuses on presidential records. Also, information on the Federal Records Act (FRA), more broadly, is available in CRS Reports CRS Report R43072, Common Questions About Federal Records and Related Agency Requirements , by Meghan M. Stuessy and CRS In Focus IF11119, Federal Records: Types and Treatments , by Meghan M. Stuessy.

The PRA governs the records of the President, Vice President, and certain components of the Executive Office of the President (EOP). The PRA specifies roles and responsibilities for the management and enforcement of presidential records policy to the President, the National Archives and Records Administration (NARA), and the Department of Justice (DOJ).

The PRA requires the President to take "all such steps as may be necessary to assure that the activities, deliberations, decisions, and policies that reflect the performance of the President's constitutional, statutory, or other official or ceremonial duties are adequately documented." The President is further directed to implement records management controls to accomplish these ends and may consult NARA and DOJ on how to best comply with the statute.

NARA preserves selected government records, oversees recordkeeping throughout the government, and makes government records publicly available pursuant to the PRA and other authorities. NARA provides advice and assistance to the White House on records management practices upon request, throughout a presidential transition and a presidency, and to former Presidents. The PRA details which presidential records and materials NARA is to assume responsibility for at the conclusion of a President's Administration. The PRA requires the head of NARA, the Archivist of the United States, to consult with Congress and particular congressional committees on requests for the disposal of such records deemed to be of special congressional interest.

DOJ provides guidance to the executive branch on how to comply with the legal requirements of government information policy, of which records maintenance policy, including presidential records, is a part. Additionally, the Archivist and the Attorney General jointly investigate the unlawful removal or destruction of government and presidential records.

documentary materials, or any reasonably segregable portion thereof, created or received by the President, the President's immediate staff, or a unit or individual of the Executive Office of the President whose function is to advise or assist the President, in the course of conducting activities which relate to or have an effect upon the carrying out of the constitutional, statutory, or other official or ceremonial duties of the President. Such termâ

(A) includes any documentary materials relating to the political activities of the President or members of the President's staff, but only if such activities relate to or have a direct effect upon the carrying out of constitutional, statutory, or other official or ceremonial duties of the President.

This definition of presidential records is distinct from federal records and excludes a President's personal records. Unlike federal records, which may be considered temporary or permanent records depending on their content, all presidential records are considered permanent records due to their permanent value and, as a result, should be maintained in perpetuity by the federal government, subject to some limitations described below. A President's personal recordsâidentified in the PRA as documents "of a purely private or nonpublic character"âare excluded from preservation requirements.

As a result of the Presidential and Federal Records Act Amendments of 2014, all government records (both presidential and federal) are assessed for preservation not by the media used to store the information but rather by the content of the information itself. In the PRA's case, documentary materials , of which presidential records are a part, includes "all books, correspondence, memoranda, documents, papers, pamphlets, works of art, models, pictures, photographs, plats, maps, films, and motion pictures, including, but not limited to, audio and visual records, or other electronic or mechanical recordations, whether in analog, digital, or any other form." If the content of any documentary material meets the criteria of a presidential record, the information must be preserved according to the PRA regardless of the information's format.

Presidential records are additionally protected and restricted from public consumption for a set period of time. Because of these additional restrictions on presidential records versus federal records, it is important to identify which organizations within the EOP create presidential records instead of federal records. Additionally, the time during a President's life in which the documents are created may help differentiate between personal, private records and presidential records.

As defined in statute, the President and the President's immediate staff create presidential records. However, certain EOP components create presidential records, while others create federal records. The difference in statutory application between these components may have implications for access to their records. According to NARA, EOP components considered to "solely advise and assist the President" and therefore create presidential records include:

The White House Office, The Office of the Vice President, The Office of Policy Development, The Council of Economic Advisors, The National Security Council, The President's Foreign Intelligence Advisory Board, The President's Intelligence Oversight Board, The National Economic Council, and The Office of Administration.

Conversely, NARA has identified EOP components that create federal records and not presidential records as follows:

The Office of Management and Budget, The Office of the United States Trade Representative, The Council on Environmental Quality, The Office of Science and Technology Policy, and The Office of National Drug Control Policy.

The PRA distinguishes between a President's personal records and presidential records. Personal records of a purely private or nonpublic character include such things as diaries or journals but also include (1) materials relating exclusively to the President's own election and to the election of a particular individual or individuals to federal, state, or local office that "have no relation to or direct effect upon the carrying out of constitutional, statutory, or other official or ceremonial duties of the President;" and (2) materials relating to private political associations. Because personal records are not presidential records, they are not subject to the same materials retention or access requirements.

Records created by the President-elect and his transition team prior to inauguration are considered personal records. However, NARA notes, "To the extent that these records are received and used after the inauguration by the incoming Presidential Administration, they may become Presidential or Federal records. Former Presidents have traditionally donated these personal transition records to [NARA] for deposit in their Presidential Library."

During the 2016 election cycle, NARA issued additional guidance relating to President-elect transition team materials where it specified how the PRA would govern such materials. As the statute makes clear, materials relating to the President's own election (e.g., campaign materials) are not considered presidential records. Similarly, transition team materials are considered personal and private, not presidential records. In instances where the transition team receives briefing materials from a federal agency, however, the briefing materials are considered federal records of the briefing agency and maintained accordingly.

Who Decides If Information Is a Presidential Record?

While statute allows for materials relating to campaign events and private political associations to be considered personal records so long as the materials have no relation to or direct effect upon the carrying out of the President's various duties, critically, the President has a high degree of discretion over what materials are to be preserved under the PRA.

NARA does not have direct oversight authority over the White House records program as it does over federal agencies' records programs. Instead, NARA "provides advice and assistance to the White House on records management practices upon request," which would appear to give the President discretion over which materials might be included under the PRA. As noted previously, whether these records are classified as presidential or personal records affects public and congressional access to such materials. For example, the PRA does not provide an access mechanism for personal records.

In the event of potentially unlawful removal or destruction of government records, Title 44, Section 3106, of the U.S. Code requires the head of a federal agency to notify the Archivist, who initiates action with the Attorney General for the possible recovery of such records. The Archivist is not authorized to independently investigate removal or recover records.

Custody and Control of Presidential Records

Policies concerning the custody of presidential materials informs the way such information is controlled, accessed, and released during and after a President's time in office. Prior to the PRA's enactment, presidential papers were traditionally the private property of the President, who would then donate the materials to institutions for public consumption. The PRA fundamentally changed the status of presidential records as publicly owned materials.

The PRA is explicit: "The United States shall reserve and retain complete ownership, possession, and control of Presidential records; and such records shall be administered in accordance with the provisions of this chapter." In passing the PRA, Congress required that "public access to the materials would be consistent under standards fixed in law." The PRA provides records maintenance requirements and permissions depending on whether a presidency is in progress or has concluded.

During a presidency, the incumbent President is exclusively responsible for custody, control, and access to presidential records, and the Archivist may maintain and preserve the records on behalf of the President. While the PRA establishes the President's responsibility, NARA notes that the agency is available for the President to consult with regarding records management practices upon request, although the PRA does not require such a consultation.

An incumbent President also has authority under the PRA to seek the disposal of records, which routinely occurs with temporary records under the Federal Records Act. All presidential records are initially considered permanent records, but the PRA provides a process for the incumbent President to seek a change in the disposal schedule of the President's own records by obtaining the Archivist's written approval.

Additionally, such presidential records may be disposed of if the President submits copies of the intended disposal schedule to (a) the Senate Committee on Rules and Administration and the Senate Committee on Homeland Security and Governmental Affairs, and (b) the House Committee on Oversight and Government Reform (now the House Committee on Oversight and Reform) and the House Committee on Government Operations (now the House Subcommittee on Government Operations) at least 60 calendar days before the proposed disposal date.

If the Archivist considers the identified records in the President's proposed disposal schedule to be of special interest to Congress or that consultation with Congress is necessary to assess the disposal request, the Archivist shall request the advice of the listed committees.

After a presidency, the responsibility for the custody, control, preservation of, and access to presidential records shifts to the Archivist. Additionally, statute requires the Archivist to make the former President's records publicly available as rapidly and as completely as possible.

The PRA does not provide the former President with a process for disposing of presidential records after leaving office. In contrast to the disposal request process for incumbent Presidents, the Archivist may dispose of a former President's presidential records if they are deemed by the Archivist to have insufficient value to warrant their continued preservation. The Archivist must publish a notice in the Federal Register at least 60 days in advance of the proposed disposal date.

Because the United States owns all presidential records, a former President must seek the Archivist's permission to display presidential records in a different facility, such as a presidential library. The Archivist is directed to deposit all of the former President's records in a presidential archival depository or another federal archival facility and is authorized to designate, after consultation with the former President, a director of the chosen facility who is responsible for the care and preservation of the records. Presidential libraries are not constructed using federal funds but are operated and maintained by NARA through its budget.

Restricted Access to Presidential Records

The PRA does not establish automatic access for an incumbent President's records, which may be protected by executive privilege on a case-by-case basis. However, the PRA does statutorily narrow an outgoing President's ability to restrict records access. As the length of time between the conclusion of a presidency and the present day increases, presidential records become more accessible.

Access to a former President's records is governed in terms of time passed since the conclusion of the presidency:

Less than five years out, no public access is granted due to the Archivist's processing of the records. Between five and 12 years out, the Archivist determines PRA restrictions in accordance with Title 44, Section 2204, of the U.S. Code with the former President. After 12 years, these PRA restrictions no longer apply.

The Freedom of Information Act (FOIA; 5 U.S.C. Â§552) governs the public release of government information, including presidential records. Throughout these time periods, FOIA exemptions (for example, information that is prohibited from disclosure by another federal law) may additionally restrict records access. However, records created by a former President are not subject to FOIA's (b)(5) deliberative process exemption (which incorporates the deliberative process, executive, and attorney-client privileges, among others).

The PRA (44 U.S.C. Â§2204) permits the outgoing President to restrict access to six categories of presidential records for specified durations of time, not to exceed 12 years. The records categories for which a former President can restrict access include:

1. Records described in an executive order as in the interest of national defense or foreign policy or are otherwise classified documents, 2. Records relating to appointments to federal office, 3. Records specifically exempted from disclosure by statute, 4. Records that contain trade secrets and commercial or financial information, 5. Records of confidential communications requesting or submitting advice between the President and the President's advisers or between such advisers, and 6. Records of personnel and medical files whose disclosure would constitute an invasion of personal privacy.

After the expiration of the 12-year period, under Executive Order 13489, incumbent and former Presidents must be notified of the Archivist's intent to disclose materials at least 30 days in advance of the release of the records. Prior to this release, incumbent and former Presidents may assert a claim of executive privilege over certain presidential records, thereby limiting public access. If an incumbent President invokes a claim of executive privilege over the release of a former President's records, the Attorney General and the Counsel to the President shall review and decide whether the invocation of executive privilege is justified.

Similarly, if a former President invokes a claim of executive privilege, the current Archivist, Attorney General, and Counsel to the President are to confer and determine whether to honor the former President's claim of executive privilege. The incumbent President may extend the time period to withhold the records and is to provide a reason for the extension.

Exceptions to Restricted Access of a Former President's Records

Certain federal officials may access a former President's records within the 12-year time frame by gaining "special access" to presidential records. Per the PRA:

[S]ubject to any rights, defenses, or privileges which the United States or any agency or person may invoke, Presidential records shall be made availableâ

(A) pursuant to subpoena or other judicial process issued by a court of competent jurisdiction for the purposes of any civil or criminal investigation or proceeding;

(B) to an incumbent President if such records contain information that is needed for the conduct of current business of the incumbent President's office and that is not otherwise available; and

(C) to either House of Congress, or, to the extent of matter within its jurisdiction, to any committee or subcommittee thereof if such records contain information that is needed for the conduct of its business and that is not otherwise available.

Observers have questioned what constitutes a House or Senate request for presidential records and who needs to make the request for the records for it to qualify under Section 2205(C). However, NARA explains that its "longstanding and consistent practice has been to respond only to requests from the Chair of Congressional Committees, regardless of which political party is in power." This practice as a result of statutory ambiguity may impact the ability of minority party members or general committee members to gain access to presidential records.

Issues for Congress: Enforcement of the PRA

The PRA's effectiveness relies on its ability to be enforced, both in terms of accessing presidential records for oversight purposes through the mechanisms described in statute and in terms of maintaining the records themselves so that they may be accessed. In light of the Presidential and Federal Records Act Amendments of 2014 requirement to collect presidential records regardless of their media but based on their content, questions regarding the volume and the meaning of an electronic record's completeness are creating policy implications that may be suitable for congressional consideration. These matters may be of particular interest to Congress as it carries out its oversight activities and ensures that emerging formats of presidential records are effectively collected and controlled.

Volume of Electronic Presidential Records

The volume of presidential records has increased exponentially in the digital age, as indicated by reporting on the amount of such records at the conclusion of a presidency. According to NARA's 2009 Report on Alternative Models for Presidential Libraries , the Clinton Administration provided NARA 20 million presidential record emails at the conclusion of the President's eight-year tenure. The George W. Bush Administration provided 150 million email records after its eight-year tenureâmore than seven times the number of emails provided by the previous Administration. To date, the Barack Obama Presidential Library estimates that NARA has received 300 million emails, doubling the amount from the previous Administration.

"Huge volumes of electronic information" are a "major challenge" in record management, according to the Government Accountability Office (GAO), and "electronic information is increasingly being created in volumes that pose a significant technical challenge to our ability to organize it and make it accessible."

NARA's ability to process the volume of presidential records is closely linked to information access issues. In its FY2020 congressional budget justification, NARA noted it has "a significant backlog of unanswered [FOIA] requests at Presidential Libraries covered" by the PRA in part because of the volume of records and the information restriction process:

NARA must review all Presidential papers page-by-page, to identify and redact national security and other restricted information, which means it will take decades to make all of the records available to the public. Processing records in response to FOIA requests is even more time-consuming than processing the same number of pages in a systematic, archival fashion and does not produce discrete records collections that would be meaningful to the general public.

Because of this increased volume, NARA's ability to keep pace with the explosion of records will be dependent on NARA's staffing, funding, and training levels. Any delay in NARA's processing of records may impact the ability of interested parties to access materials in a timely fashion, and NARA's ability to comply with the PRA's statutory directive to make records available as rapidly and completely as possible.

Completeness of Electronic Presidential Records

The increasing use of electronic records also requires the institutions involved in presidential records oversight to ensure the record information's authenticity and completeness. The EOP and NARA need to ensure that record materials are appropriately protected from corruption or destruction, but these protections take on a different meaning in a digital, instead of analog, environment.

Given the increase in presidential records, Congress may consider whether or not the presidential records institutions are able to consistently meet NARA directives, bearing in mind that while NARA supervises agency implementation of the FRA, NARA provides advice and assistance to the White House on records management practices upon request . NARA has provided guidance on including metadata elements in the collection of federal records under the FRA that the EOP may adopt as well. However, data on implementation is self-reported by agencies, and similar information is not required to be provided for presidential records on a routine basis.

Last updated in 2005, NARA's guidance on identifying and maintaining trustworthy websites says that such records have the following characteristics:

reliability: content is trusted as a full and accurate representation of transactions, activities, or facts; authenticity: proven to be what it purports to be; integrity: complete and unaltered; and usability: can be located, retrieved, presented, and interpreted.

NARA's guidance suggests that agencies "maintain the content, context, and sometimes the structure of" their websites to ensure that their records are trustworthy.

One instructive example is NARA's attempts to archive underlying documents and web materials on whitehouse.gov. While collecting records material appears to be a straightforward task, policy decisions such as when and what to collect impact the material's context (i.e., the circumstances that situate the material and give it meaning), usability, and completeness. Some accompanying digital information, such as who accessed the information or reviewed the document, may not be available without holistic preservation.

For example, NARA acknowledges that it does not archive the user interface of the White House website, but it has attempted to "freeze" an approximation of the website as it appeared at the conclusion of a presidency and not at various points during an Administration. Further, NARA notes, "These 'frozen in time' sites are representations of the original websites and approximate the interface and functionality for easy access by the public. These websites are no longer updated so links to external websites and some internal pages will not work." Such decisions may have implications on the type of information available to future researchers, federal agencies, and Congress.