How Social Security Benefits Are Computed: In Brief

Summary: Social Security, the largest program in the federal budget (in terms of outlays), provides monthly cash benefits to retired or disabled workers and their family members as well as to the family members of deceased workers. In 2018, benefit outlays were approximately $989 billion, with roughly 63 million beneficiaries and 176 million workers in Social Security-covered employment. Under current law, Social Security's revenues are projected to be insufficient to pay full scheduled benefits after 2035.

Summary: Monthly benefit amounts are determined by federal law. Social Security is of ongoing interest both because of its role in supporting a large portion of the population and because of its long-term financial imbalance, and policymakers have considered numerous proposals to change its benefit computation rules.

Summary: The Social Security benefits that are paid to worker beneficiaries and to workers' dependents and survivors are based on workers' past earnings. The computation process involves three main steps

Summary: First, a summarized measure of lifetime earnings is computed. That measure is called the average indexed monthly earnings (AIME). Second, a benefit formula is applied to the AIME to compute the primary insurance amount (PIA). The benefit formula is progressive. As a result, workers with higher AIMEs receive higher Social Security benefits, but the benefits received by people with lower earnings replace a larger share of past earnings. Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving payments. For retired workers who claim benefits at the full retirement age (FRA) and for disabled workers, the monthly benefit equals the PIA. Retired workers who claim earlier receive lower monthly benefits, and those who claim later receive higher benefits.

Summary: Retired worker benefits can be affected by other adjustments. For example, the windfall elimination provision can reduce benefits for individuals who receive a pension from non-Social Security-covered earnings, and benefits can be withheld under the retirement earnings test if an individual continues to work and earns above a certain amount. Although not an adjustment, Social Security benefits can be subject to income tax, thereby affecting the beneficiary's net income.

Summary: Benefits for eligible dependents and survivors are based on the worker's PIA. For example, a dependent spouse receives a benefit equal to 50% of the worker's PIA, and a widow(er) receives a benefit equal to 100% of the worker's PIA. Dependent benefits may also be adjusted based on the age at which they are claimed and other factors.

Social Security, which paid about $989 billion in benefits in 2018, is the largest program in the federal budget in term s of outlays. There are currently about 63 million Social Security beneficiaries.

Most Social Security beneficiaries are retired or disabled workers, whose monthly benefits depend on their past earnings, their age, and other factors. Benefits are also paid to workers' dependents and survivors, based on the earnings of the workers upon whose work record they claim.

Social Security has a significant impact on beneficiaries, both young and old, in terms of income support and poverty reduction. Under current law, Social Security's revenues are projected to be insufficient to pay full scheduled benefits after 2035. For both of those reasons, Social Security is of ongoing interest to policymakers. Most proposals to change Social Security outlays would change the benefit computation rules. Evaluating such proposals requires an understanding of how benefits are computed under current law.

A person who has a sufficient history of earnings in employment subject to Social Security payroll taxes becomes insured for Social Security, which makes the worker and qualified dependents eligible for benefits. Insured status is based on the number of quart ers of coverage (QCs) earned. In 2019, a worker earns one QC for each $1,360 of earnings, and a worker may earn up to four QCs per calendar year. The amount needed for a QC increases annually by the growth in average earnings in the economy, as measured by Social Security's average wage index.

To be eligible for most benefits, workers must be fully insured , which requires one QC for each year elapsed after the worker turns 21 years old, with a minimum of 6 QCs and a maximum of 40 QCs. A worker is first eligible for Social Security retirement benefits at 62, so to be eligible for retirement benefits, a worker must generally have worked for 10 years. Workers are permanently insured when they are fully insured and will not lose fully insured status when they stop working under covered employment, for example, if a worker has the maximum 40 QCs.

Benefits may be paid to eligible survivors of workers who were fully insured at the time of death. Some dependents are also eligible if the deceased worker was currently insured , which requires earning 6 QCs in the 13 quarters ending with the quarter of death.

To be eligible for disability benefits, workers must also satisfy a recency of work requirement. Workers aged 31 and older must have earned 20 QCs in the 10 years before becoming disabled. Fewer QCs are required for younger workers.

In the case of workers having work history in multiple countries, international totalization agreements allow workers who divide their careers between the United States and certain countries to fill gaps in Social Security coverage by combining work credits under each country's system to qualify for benefits under one or both systems.

The first step of computing a benefit is determining a worker's average indexed monthly earnings (AIME), a measure of a worker's past earnings.

Rather than using the amounts earned in past years directly, the AIME computation process first updates past earnings to account for growth in overall economy-wide earnings. That is done by increasing each year of a worker's taxable earnings after 1950 by the growth in average earnings in the economy, as measured by the national average wage index, from the year of work until two years before eligibility for benefits, which for retired workers is at 62. For example, the Social Security average wage grew from $32,155 in 2000 to $41,674 in 2010. So if a worker earned $20,000 in 2000 and turned 60 in 2010, the indexed wage for 2000 would be $20,000 x ($41,674/$32,155), or $25,921. Earnings from later years—for retired workers, at ages 61 and above—are not indexed.

For retired workers, the AIME equals the average of the 35 highest years of indexed earnings, divided by 12 (to change from an annual to a monthly measure). Those years of earnings are known as computation years . If the person worked fewer than 35 years in employment subject to Social Security payroll taxes, the computation includes some years of zero earnings.

In the case of workers who die before turning 62 years old, the number of computation years is generally reduced below 35 by the number of years until he or she would have reached 62. For example, the AIME for a worker who died at 61 is based on 34 computation years.

For disabled workers, the number of computation years depends primarily on the age at which they become disabled, increasing from 2 years for those aged 24 or younger to 35 years for those aged 62 or older.

The next step in determining a benefit is to compute the primary insurance amount (PIA) by applying a benefit formula to the AIME.

First, the AIME is sectioned into three brackets (or segments) of earnings, which are divided by dollar amounts known as bend points. In 2019, the bend points are $926 and $5,583. Those amounts are indexed to the national average wage index, so they generally increase each year.

Three factors, which are fixed by law at 90%, 32%, and 15%, are applied to the three brackets of AIME. For workers with AIMEs of $926 or less in 2019, the PIA is 90% of the AIME. Because the other two factors are lower, that share declines as AIMEs increase, which makes the benefit formula progressive. For workers who become eligible for retirement benefits, become disabled, or die in 2019, the PIA is determined as shown in the example in Table 1 and in Figure 1 .

Benefits are based on covered earnings. Earnings up to the maximum taxable amount ($132,900 in 2019) are subject to the Social Security payroll tax. If a worker earns the maximum taxable earnings in every year of a full work history and becomes eligible in 2019, the maximum PIA is $2,861.

Wage Indexing Results in Stable Replacement Rates

In the AIME computation, earnings are indexed to the average wage index, and the bend points in the benefit formula are indexed to growth in the average wage index. As a result, replacement rates—the portion of earnings that benefits replace—remain generally stable. That is, from year to year, the average benefits that new beneficiaries receive increase at approximately the same rate as average earnings in the economy.

A cost-of-living adjustment (COLA) is applied to the benefit beginning in the second year of eligibility, which for retired workers is age 63. The COLA applies even if a worker has not yet begun to receive benefits. The COLA usually equals the growth in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one calendar year to the third quarter of the next year. Beneficiaries will receive a COLA of 2.8% for benefits paid in January 2019.

How Timing of Benefit Claim Affects Benefit Levels

The full retirement age (FRA, also called the normal retirement age) is the age at which a worker can receive the full PIA, increased by any COLAs. The FRA was 65 for people born before 1938, but the Social Security Amendments of 1983 ( P.L. 98-21 ) raised the FRA for those born later, as shown in Table 2 .

Adjustments for Early and Late Benefit Claim

Retired workers may claim benefits when they turn 62 years old, but the longer that they wait, the higher their monthly benefit. The higher monthly benefit is intended to offset the fewer number of payments that people who delay claim will receive over their lifetimes, so that the total value of lifetime benefits is approximately the same regardless of when they claim based on average life expectancy.

The permanent reduction in monthly benefits that applies to people who claim before the FRA is called an actuarial reduction. It equals 6⅔% per year for the first three years of early claim and 5% for additional years.

The permanent increase in monthly benefits that applies to those who claim after the FRA is called the delayed retirement credit. For people born in 1943 and later, that credit is 8% for each year of delayed claim after the FRA, up to age 70.

For people with an FRA of 66, therefore, monthly benefits are 75% of the PIA for those who claim benefits at the age of 62 and 132% of the PIA for people who wait until the age of 70 to claim (see Figure 2 ). Because people who claim earlier receive more payments over a lifetime, the overall effect of claiming at different ages depends on how long the beneficiary lives. For example, someone who dies at 71 years old would be better off claiming early, but someone who survives to 95 would be better off claiming late.

An increase in the FRA can result in lower benefits in two ways. First, monthly benefits will be different for individuals who have identical work histories and the same age of claiming benefits, but who have different FRAs. For example, someone with an FRA of 66 and who claims at age 62 will receive a monthly benefit equal to 75% of the PIA. For someone with an FRA of 67, claiming at 62 will result in a monthly benefit that is 70% of the PIA. Depending on the claim age, the scheduled increase in the FRA from 66 to 67 will reduce monthly benefits by between 6.1% and 7.7%. Second, lifetime benefits will be different for workers who have identical work histories and identical age of death, but different FRAs. For example, consider two workers who have FRAs of 65 and 67, respectively, both of whom claim at their FRA, and thus receive identical monthly benefits. If both workers die at age 75, the worker with an FRA of 65 will have received monthly benefits for 10 years, compared with the worker with an FRA of 67, who will have received monthly benefits for 8 years.

Social Security benefits are payable to the spouse, divorced spouse, or dependent child of a retired or disabled worker and to the widow(er), divorced widow(er), dependent child, or parent of a deceased worker. When dependent beneficiaries also earned worker benefits, they receive the larger of the worker or the dependent benefit.

A spouse's base benefit (that is, before any adjustments) equals 50% of the worker's PIA. A widow(er)'s base benefit is 100% of the worker's PIA. The base benefit for children of a retired or disabled worker is 50% of the worker's PIA, and the base benefit for children of deceased workers is 75% of the worker's PIA.

Other benefit adjustments apply in certain situations, notably

the windfall elimination provision (WEP), which reduces benefits for worker beneficiaries who have pensions from employment that was not subject to Social Security payroll taxes; the government pension offset (GPO), which reduces Social Security spousal benefits paid to people who have pensions from employment that was not subject to Social Security payroll taxes; the retirement earnings test , which results in a withholding of monthly Social Security benefits paid to beneficiaries who are younger than the full retirement age and have earnings above a certain level; and the maximum family benefit , which limits the amount of benefits payable to a family based on a worker's record.

In some cases, a portion of Social Security benefits may be subject to federal income tax. Taxation is not a benefit adjustment, but it does affect the net income of beneficiaries. For additional information, see CRS Report RL32552, Social Security: Calculation and History of Taxing Benefits .


Background Ozone: Challenges in Science and Policy

Summary: Exposure to ozone, a common air pollutant, has been linked to early death, plant and crop damage, and damage to property. The U.S. Environmental Protection Agency (EPA) sets National Ambient Air Quality Standards (NAAQS) for ground-level ozone to protect human health and welfare with, by law, a "margin of safety." States that contain areas with ozone concentrations above these standards must develop plans to reduce emissions and improve air quality. However, states have direct control only over emission sources located within their borders.

Summary: The Clean Air Act (CAA) requires EPA to re-evaluate the NAAQS every five years to include the latest science and technological advancements. Studies reporting the human health impacts of ozone increasingly suggest that ozone exposure may not be completely safe at any level. With the potential for a NAAQS re-evaluation leading to science-based recommendations for a tighter standard, some stakeholders have expressed increasing concern that future—and even current—ozone standards could be difficult to meet due to the contribution of "background ozone," which arises from a variety of sources described in this report. In some areas of the United States, background ozone may be approaching 70 parts per billion (ppb) on some days, the current level of the NAAQS.

Summary: Some Members of Congress have expressed interest in adverse health effects that occur at or below the current standard, challenges some nonattainment areas may have in meeting current standards, and particularly the responsibilities for meeting the health standard, given interstate and international transport. EPA's review of the ozone NAAQS is underway and set to be completed in 2020, with background ozone contributions suggested as a topic to be addressed. Congress may have an interest in better understanding scientific capabilities, needs, and efforts to improve understanding of contributions from background sources, as well as options for regulatory responses.

Summary: Defining Background Ozone

Summary: Three terms are used for different types of background ozone, and distinguishing among them can be important for regulatory purposes.

Summary: 1. Natural background. Ozone concentrations that would be present without any human influence or contribution from anywhere on the globe. Natural background includes contributions from wildfires, vegetation, lightning, ozone in the stratosphere, and global methane concentrations. Contributions to background ozone from wildfires and methane have been increasing over the past several decades. 2. North American background. Ozone concentrations absent human-caused emissions from North America. North American background includes all sources in natural background plus ozone from international sources outside North America. Studies suggest that Asian emissions may be contributing to ozone in the United States, especially in Western states, but that those contributions may be beginning to decrease. 3. United States background. Ozone concentrations absent human-caused emissions from the United States. U.S. background includes all sources in North American background plus ozone formed from emission sources in Mexico and Canada.

Summary: The CAA provides alternative regulatory options for areas that successfully demonstrate significant influence from some specific sources of natural background ozone on ozone exceedences. However, such demonstrations may be difficult to conduct and reliably assess, given data and analytical challenges:

Summary: Emissions inventories. Current understanding of the amount, location, and type of pollutant emissions from many types of sources is insufficient. Therefore inventories typically provide estimations, which may not be precise enough for apportioning contributions. Weather data. Meteorological data (i.e., wind speed, wind direction, temperature, cloud cover, humidity, etc.) are not currently measured at a fine enough spatial scale to adequately represent relevant weather processes. Ambient air quality measurements. Data on pollutant concentrations are limited, which increases the challenge of understanding ozone formation and movement. Fine spatial and temporal measurements are needed both horizontally across the surface and vertically to higher levels of the atmosphere. Source contribution variability. Background ozone source contributions change by year, season, day, and hour and from location to location. This makes it difficult to project future contributions, including when contributions will be relevant to attainment status.

Summary: This report provides information on sources of background ozone, presents key challenges in addressing these sources, and discusses potential options to overcome these challenges.

Exposure to ozone (often referred to as "smog"), regardless of where that ozone originates, has been linked to negative human health effects, including respiratory ailments and premature death. Children, the elderly, and persons with respiratory illnesses are particularly susceptible to adverse health impacts from ozone exposure. EPA estimates that ozone exposure was responsible for more than 15,000 premature deaths in the United States in 2007 based on 2006-2008 average ambient ozone concentrations. Ozone has also been linked to plant damage and decreases in crop yield.

Concentrations of ozone at the ground level, originally considered a local issue, is increasingly recognized as a global challenge. Ozone is not emitted directly but is formed in the atmosphere from chemical reactions of nitrogen oxides (NO x ) with volatile organic compounds (VOCs, a type of hydrocarbon) in the presence of sunlight. NO x and VOCs are known as "precursor" emissions, and their relative contributions to the formation of ozone depends on a number of factors, including weather conditions and concentrations of other pollutants. The lifetime of ozone in the atmosphere ranges from hours to weeks, providing time—under the right conditions—for pollution emitted in one location to affect the health and welfare of populations far downwind (see Figure 2 ).

While local emissions of ozone precursors are still the dominant source of ozone in many areas, state and local air quality agencies face ozone pollution arising from sources outside of their jurisdictional control ("background ozone"). As will be described and discussed in this report, potential long-range transport of air pollutants presents a challenge to downwind communities. It can also be an opportunity for cooperation among localities, states, and countries.

The Clean Air Act (CAA) directs the U.S. Environmental Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) to protect public health (primary standards) and welfare (secondary standards). The law directs that "the attainment and maintenance of [primary standards] are requisite to protect the public health." While the standards are set to limit adverse impacts, EPA acknowledges that these standards do not suggest that concentrations below these levels present zero risk. The NAAQS set limits for the concentrations in ambient air of six common "criteria" pollutants: lead, nitrogen oxides, sulfur dioxide, carbon monoxide, particulate matter, and ozone. There is no evidence of a safe level of ozone exposure below which no adverse health effects occur. However, uncertainty between exposure and health response increases at very low ozone concentrations—that is, below 20 parts per billion (ppb).

Air quality monitoring stations in the United States measure concentrations of the six criteria pollutants, and these measurements are used to determine whether locations meet the NAAQS. If a monitor measures concentrations above the standard for any of those six pollutants for an averaging time specified in the NAAQS, the area around that monitor may face a "nonattainment" designation for that pollutant. Once designated nonattainment, the state containing that area must propose a plan to bring the area into attainment of the NAAQS. These State Implementation Plans (SIPs) require approval by EPA.

State air quality regulators develop SIPs to attain NAAQS for ambient air in their states, and they have jurisdiction only over the sources of emissions within their borders. The levels of pollution flowing into nonattainment regions, generally referred to as "background pollution," may be making it more difficult for some areas of the United States to meet attainment. Congress recognized this challenge when it enacted the original CAA, adding the "good neighbor provision," which addressed interstate transport of human-caused air pollution that contributes to nonattainment. For detailed information about domestic air transport, see CRS Report R45299, The Clean Air Act's Good Neighbor Provision: Overview of Interstate Air Pollution Control , by Kate C. Shouse.

The CAA also mandates EPA to review the NAAQS every five years and revise them as appropriate. EPA completed its most recent review of the ozone standard in 2015, when it lowered the standard from 75 ppb to 70 ppb. EPA reported that it has begun the next ozone NAAQS review and that it intends to complete it by 2020. The procedure for reviewing and setting the NAAQS explicitly does not consider what sources contribute to total ozone, including background sources.

In 2018, EPA announced plans to streamline the NAAQS review process and obtain Clean Air Scientific Advisory Committee advice regarding background pollution and potential adverse effects from NAAQS compliance strategies. EPA's "Back-to-Basics" memorandum described concerns that background levels of pollution pose a challenge to meeting NAAQS standards. The memorandum noted a call from certain state regulators for advice on how to treat background ozone, stating that "state environmental agencies have sought this advice, citing the 'absolute need for a valid source of information about background concentrations.'" Additionally, EPA created a task force to develop "additional flexibilities for states to comply with the ozone standard."

Much of the focus of ozone transport and control has historically been on upwind domestic sources. Members of Congress may have an interest in better understanding background ozone from natural and international sources, particularly as EPA reviews the 2015 ozone standard. Contributions from sources of background ozone may become important as states with nonattainment areas develop SIPs that attempt to quantify these contributions and consider ways to address them. To assist Congress in understanding these issues, this report defines background ozone , focusing on natural and international sources, and describes what is currently known about these sources. The report then goes on to discuss the limitations in the scientific community's understanding and options for deepening that understanding.

This report will discuss background air pollution primarily in the context of ground-level ozone. As of 2018, with the 2015 ozone standard set at 70 ppb, there are 52 areas in the United States designated "nonattainment" for ozone (see Figure 1 ). Current research suggests that natural sources and sources outside the United States may contribute to total ozone in those areas at certain times. Many of the issues discussed here are not unique to ozone, however, and may apply to other pollutants covered by NAAQS, and any potential actions taken to understand or reduce background ozone may also reduce background concentrations of other pollutants.

This report deals exclusively with ozone measured at ground level and its adverse health and material effects. Ozone Transport 101 and Figure 2 provide additional information about ozone in different layers of the atmosphere and how each layer may interact with, or contribute to, ozone at ground level.

EPA defined natural background (NB) and U.S. background (USB) in the final 2015 ozone rule (the chemical notation of ozone is O 3 ):

NB is defined as the O 3 that would exist in the absence of any manmade precursor emissions. USB is defined as that O 3 that would exist in the absence of any manmade emissions inside the U.S. This includes anthropogenic emissions outside the U.S. as well as naturally occurring ozone.

A third term, North American background , is also defined in this report for added clarity. Each is explained in more detail below.

Natural background ozone is what the average concentration of ground-level ozone would be without any human influence. Ozone forms naturally in the lower levels of the atmosphere due to natural emissions of precursors from sources including lightning, vegetation, wildfires, and methane. Transport of ozone vertically from the stratosphere to the atmospheric layer at ground level (called stratospheric intrusions) is a fifth major source. No air pollution monitors today are able measure true present day NB because human contributions to the formation of ozone are so widespread globally. The only way to estimate NB is with global scale atmospheric chemistry simulation models with inputs representing conditions without human influence.

The remainder of this section summarizes the five major contributors to NB. A key point is that t he estimated contri butions presented are uncertain and are very dependent on both location and timing . The "Challenges in Estimating Background Ozone" section discusses specific challenges and uncertainties associated with the data and the modeling projects.

1. Lightning (NO x ) . Lightning flashes cause naturally occurring nitrogen and oxygen in the atmosphere to react and generate NO x molecules. Lightning and the resulting emissions occur primarily during the warmer months and are released in the free troposphere, which is above the well-mixed ground layer (see Figure 2 ). There is data to suggest that lightning contributes to daily, as well as seasonal average, ozone concentrations in high impact areas. 2. Vegetation (VOCs) . Trees release VOCs as a byproduct of photosynthesis. Biogenic VOCs from vegetation are the largest emissions source of VOCs in the United States, making up about 70% of the total inventory. Vegetation emissions are largest during the spring and summer, when plants are actively growing. For plants and trees that have leaves only seasonally, emissions decline as leaves drop and photosynthesis ends. 3. Wildfires (VOCs and NO x ) . Wildfires release both NOx and VOCs (as well as fine particles), but the amount and the reactivity of the polluting emissions depend on the type of fuel that is burning and how quickly and how hot the fire burns. Controlled/prescribed fires tend to burn cooler and release fewer pollutants. Current research suggests that active fires contribute to daily as well as seasonal average ozone concentrations. Research to improve emissions inventories from fire events is ongoing. 4. Stratospheric intrusions . Ozone occurs naturally in the stratosphere at very high concentrations and can occasionally be transported down to lower atmospheric levels during certain weather events (see text box "Ozone Transport 101" for more information about atmospheric layers and vertical transport of ozone). Stratospheric intrusions are more likely to affect ground-level concentrations at high elevation sites in the western United States, simply because these areas are closer to the stratosphere. These events are more common in winter and spring months because the large storms that cause them are more likely to occur in late winter and spring. 5. Methane . Methane has not been traditionally considered an ozone precursor because it does not react quickly to produce ozone. Nonetheless, it will over time react and contribute to background ozone. Methane's atmospheric lifetime is on the order of a decade, compared to a timescale of months to days for other VOCs, and so it is considered well-mixed globally by the time it contributes to the formation of ozone. It is accumulating in the atmosphere as well, raising background ozone concentrations. This ozone contribution is considered approximately spatially uniform and is increasing as methane concentrations increase. The major source contributors to global methane are natural production by bacteria in anaerobic (oxygen-free) conditions in natural wetlands or in agriculture, fossil fuel emissions leaking or venting either naturally or from energy development, and incomplete combustion of biomass or carbon.

North American background (NAB) is the estimated concentration of ozone that excludes the effects of all human-caused emissions in North America. NAB includes all NB sources as well as human-caused sources of emissions from countries outside of North America. Air quality monitors located at sites on the western coast of the United States are not consistently reliable measures of NAB for two reasons: (1) Air circulation can bring continental air over the Pacific Ocean and then back into North America. (2) If meteorological conditions are favorable, ozone pollution formed from emissions in North America can have a long enough lifetime to travel all the way around the globe and re-enter North America from the west. Therefore, like NB, modeling is the best way to estimate NAB.

Human-caused sources outside of North America are currently dominated by Asian emissions. Estimates of Asian contribution to background ozone in the United States are highly time- and location-specific. Asian precursor emissions, and resulting ozone, travel across the Pacific Ocean in the free troposphere (see Figure 2 ). However, because this pollution is traveling at higher elevations, it is more likely to impact cities and locations in the western United States located at higher elevations.

These upper-level air flows from areas in Asia are also more likely to affect the United States in the late winter, spring, and early summer due to seasonal variability in hemisphere-scale circulation patterns. Asian emissions begin to taper off in late winter, and a July/August monsoon season in eastern China reduces formation of ozone in late summer. These features suggest that the maximum impact from Asian pollution would likely occur in late winter/early spring.

U.S. background (USB) includes all contributions from NB and NAB plus all human-caused emissions from Mexico and Canada. In the publication of the most recent NAAQS for ozone, EPA generically defined background ozone as USB:

The term "background" O 3 is often used to refer to O 3 that originates from natural sources of O 3 ( e.g., wildfires and stratospheric O 3 intrusions) and O 3 precursors, as well as from man-made international emissions of O 3 precursors. Using the term generically, however, can lead to confusion as to what sources of O 3 are being considered. Relevant to the O 3 implementation provisions of the CAA, we define background O 3 the same way the EPA defines USB: O 3 that would exist in the absence of any man-made emissions inside the U.S.

Mexican and Canadian emissions primarily impact locations on the borders of those two countries, with maximum contribution estimates from one study of about 30 ppb to border cities. Model estimates of the contribution of USB to total ozone range from 25 ppb to 50 ppb, with the highest values in the inter-mountain West, based on an EPA review of model data.

The contribution of background ozone to total local ozone concentrations varies from location to location, day to day, and even hour to hour. These variations are driven both by changes in pollutant emissions from sources and by changing weather patterns that influence the chemistry and physical transport of the pollutants. There is also uncertainty associated with measuring or estimating these driving forces behind background ozone contributions.

As mentioned, estimates of source contributions to background ozone rely on computer models that simulate atmospheric chemistry and transport and the resulting pollution. These models rely on large datasets of emissions inventories and meteorological data, both with detailed hourly and location-specific data. These input data are often not available at the temporal and spatial resolution needed, and so estimates and/or simplifications must be made, which increases uncertainty. Atmospheric measurements of ozone concentrations are then compared to model output to evaluate how well the model is performing. However, measurement data of the pollutants being modeled are also limited, which increases the challenge associated with evaluating the performance of the model in capturing ozone formation and movement.

Modeling studies estimating background ozone and source attribution often present results as seasonal averages or represent time periods that may not be of specific use to regulators. See text box "Pollution Exposure Averaging Metrics" for additional information about averaging metrics.

Retrospective studies face all the challenges mentioned. Forecasting studies face the additional challenge of attempting to model the future based on historical patterns and current conditions, adding another level of uncertainty.

Trends in Background Ozone Contributions

According to EPA, NO x emissions from electricity generating units have decreased 81% nationally compared to 1990 levels due in part to the acid rain program and ozone transport rules. While these reductions have resulted in total ozone decreases across most of the United States, models suggest that temperature increases in many areas of the United States during that same time frame have negated what would have been additional ozone benefits.

Decreasing trends in total ozone concentrations measured at regulatory monitors between 1990 and 2010 generally occur in the eastern United States. Many western monitors do not show similar trends in total ozone over the same time period despite similar reductions in NO x from the power sector and individual personal vehicles. The lack of a decreasing ozone trend at many monitors in the West could be due to a number of causes: increasing seasonal average temperatures, an increase in incidents of fire since 1986, emissions from oil and gas development, increasing contributions from international transport of air pollution, and increasing global methane concentrations.

According to the 2017 U.S. National Climate Assessment, on average since 1986 in the United States, the number of wildfires and the burn duration have both quadrupled. The number of acres burned has increased six-fold, compared to 1970 to 1986. The report also indicates that total NO x emissions from fire events are expected to increase with fire temperature, duration, and area burned. Figure 3 shows the annual count, and total area burned of all wildfires larger than 1,000 acres from 1984 through 2015.

While emission inventories from Asia are highly uncertain—and outdated in some modeling cases—several sources of data suggest that Asian emissions, and potentially their impact on U.S. air quality, have peaked. Projections of fossil fuel combustion in Asian countries suggest uncertainty about peaking, although the Chinese government recently announced a target of a 15% reduction in NO x emissions by 2020 compared to 2015 emissions. A review of measurements of baseline ozone taken at monitors along the western coast of North America show that, after two decades of increasing trends, ozone flowing into the continental United States from the west stopped increasing in the mid-2000s and has begun to decrease. However, since about 2000, ozone levels measured at a rural site in Alaska have been increasing, with the source suspected in part to be transport of East Asian air.

Regulatory Relief Options for Some "Natural Sources"

Demonstrations of high ozone directly related to wildfires and stratospheric intrusions may be eligible for exclusion from an ozone attainment calculation under the Exceptional Event Rule of the CAA. In order to facilitate successful demonstrations of exceptional events, EPA released a final guidance document in 2016 for preparations of exceptional events demonstrations for wildfires. A draft guidance document was released in August 2018 covering the preparation of exceptional events demonstrations for stratospheric ozone intrusions. These documents outline expectations, but they do not provide the specific modeling platforms or tools required to conduct the successful demonstrations.

State, local, and tribal co-regulators recommended to EPA that the agency develop a similar guidance document for international emissions. Under Section 179B of the CAA, a demonstration of contribution by international sources may reduce attainment demonstration requirements in SIPs but does not provide regulatory relief from a potential nonattainment designation.

Several issues may arise for congressional deliberations with regard to background ozone pollution. Stakeholders suggest challenges with meeting the NAAQS, in part due to the difficulty of reducing ozone in areas with potentially large contributions from background sources and in part due to lack of data availability to conduct demonstrations of those background contributions. Congress may seek to understand the progress of research on background ozone as EPA revisits the NAAQS for ozone.

EPA released a state of the science background ozone white paper to stakeholders and requested feedback on major issues. The House Committee on Science, Space and Technology revisited the issue when its Subcommittee on Environment held a hearing on background ozone on June 21, 2018. The following four points summarize the opinions and policy and scientific challenges brought forth both by stakeholder responses to the EPA white paper and by the testimony from invited stakeholders at the recent background ozone hearing:

1. Some states, especially states in the western United States, have asserted that natural and non-U.S. sources of ozone and precursors have increased the ozone concentrations in their states. 2. Current statutory and regulatory options to address natural and non-U.S. sources often require technical data, modeling, and analyses that may be cost prohibitive. 3. Modeling results that attempt to quantify levels of contribution from sources are uncertain, and they represent historical, or average, impacts. 4. In most locations, especially urban locations, many studies (including the whitepaper published by EPA ) have shown that local sources contribute a large part to total local ozone.

Most recently, the U.S. Court of Appeals for the D.C. Circuit considered whether EPA should take background ozone into account when setting NAAQS. The case has not been decided at the time this report was published.

A potential avenue for Congress to address gaps in the scientific understanding of background ozone is through research and development. Therefore, Congress may consider funding implications of the following recommendations, made by stakeholders in the scientific and regulatory communities, that are intended to improve the understanding of contributions from background ozone:

International engagement and/or cooperation at the federal level and through research collaborations that may improve understanding of non-U.S. contributions to U.S. air quality and may increase cooperation for pollution reduction goals. Increased monitoring at ground level and at higher levels in the atmosphere, through state or federal regulatory air quality monitoring projects or research campaigns, to aid in analysis of background ozone trends and improve confidence in the performance of the models used to estimate background contributions. Additional research and development into model estimates of background ozone, representing additional weather patterns (i.e., El Nino/La Nina patterns can influence background ozone), and model simplification schemes to provide more information about the variability associated with background ozone contributions.

Finally, Congress may consider the role that methane plays in air quality. Methane is a precursor to ozone, and so methane emission reductions have been suggested as one option to reduce global background concentrations of ozone. Additionally, ozone itself is a strong greenhouse gas.

EPA's review of the ozone NAAQS is underway and set to be completed in 2020, with background ozone contributions suggested as a topic to be addressed. Congress may conduct oversight as EPA carries out this effort.